To underscore his point, he alluded to brisk business for his firm: “In the last several days alone, we’ve executed letters of intent to acquire over $100 million in high-quality assets at attractive cap rates, diversified portfolios, sale-leasebacks, distressed developers and early extensions among the approximately 100 properties that we currently have under control.”
Still, prudence will be exercised: “Given our acquisition volume in the first quarter and increased visibility into our pipeline, we are raising our acquisition guidance from at least $1 billion to at least $1.2 billion acquired for the year,” Agree noted. “That said, the world remains quite volatile, and we will not waiver from our stringent underwriting criteria. The investments we have made in technology and our team have provided our company a distinct competitive advantage.”
Such prudence calls for mitigating risk, he added: “We ended the first quarter with approximately $1.2 billion of liquidity, significant outstanding forward equity, and well below the low end of our target leverage range,” he said. “On earlier calls, I stressed that we would avoid moving up the risk curve or shifting our strategy. We have been very successful leveraging our relationships and core competencies to identify extremely high-quality opportunities and economic and geopolitical uncertainties remain. During the first quarter, we invested over $314 million in 95 high-quality retail net lease properties across our three external growth platforms.”
The investments include acquisition of 66 assets for approximately $302 million in the tire and auto service, home improvement, grocery, auto parts, Dollar Store, and farm and rural supply sectors, among others, Agree said.
Acquisitions abound
He attributed the company’s buying prowess to its positioning: “The breadth and variety of transactions during the quarter demonstrates our unique value proposition and the strength of our industrywide relationships,” Agree said. “We executed several sale-leasebacks with our retail partners, led by two transactions in the grocery space with national and super-regional operators, both of which carry investment-grade credit ratings.